China’s top economic planner today predicted that the world’s second-biggest economy will grow between 6.5 and 7 per cent this year.
The chairman of the National Development and Reform Commission, Xu Shaoshi, told a news conference that downward pressure on the world’s No 2 economy would continue in 2016.
But he said China would be able to achieve its growth target if it generated sufficient jobs and maintained stable prices. Xu said governments at all levels would work to manage unemployment and prevent it from affecting social stability.
“The central government will consider providing policies to help resolve this issue and I believe local governments are fully capable of handling the situation,” Xu said.
China’s economy grew 6.9 per cent last year, its slowest expansion in 25 years. Data for January suggested growth could continue to wane this year.
An official Purchasing Managers’ Index that measures manufacturing activity stood at 49.4 in January, the lowest reading since August 2012. A reading under 50 indicates a contraction in manufacturing, which in China employs many millions of workers.
Growth has been steadily falling for the past half-decade as Beijing attempts to wean the economy away from exports and infrastructure investment and toward domestic consumption and services.
However, an unexpectedly sharp decline over the past two years has stoked fears of a politically dangerous spike in job losses.
Measures to reduce overcapacity in the steel and coal industries is expected to throw hundreds of thousands out of work, and job losses have already sparked protests in some areas.